Thursday, June 7, 2012

BP is unique in Russia in that it is drawing funds out of the country's oil industry rather than investing in it

BP is at risk of becoming a takeover target if it presses ahead with a sale of
its $30bn (£19.5bn) stake in Russian joint venture TNK-BP and hands cash
back to investors, shareholders have warned.

Institutions have been told they could be in line for a $15bn windfall under
plans to split any proceeds from a sale between shareholders, investment,
and debt reduction.

However, leading shareholders said shrinking the oil major by selling its
principle Russian asset, which accounts for almost a third of BP's total oil
production, would leave it vulnerable to bids from better-rated rivals Royal
Dutch Shell and Exxon Mobil.

The warning came as Russian state oil group Rosneft was installed as the early
front-runner for BP's 50pc stake in TNK-BP, despite chairman Igor Sechin's
insistence that it had not tabled one of the "unsolicited approaches"
that triggered BP's statement on Friday. "We never thought about it.
This is a new situation that is just now developing," Mr Sechin,
Russia's former deputy prime minister, said.

BP has also begun discussions with Alfa-Access-Renova (AAR), the consortium
controlled by four oligarchs that owns the other half of TNK-BP and has
expressed an interest in buying out its partner....MORE